The New Tax Bill framed by the Ways and Means Committee in response to the request for additional revenues made by President Roosevelt on March 3, 1936, is expected to be reported to the House of Representatives within the next few days and to be passed by that body after comparatively brief debate. It is estimated that the measure in its present form would produce $799,000,000 in the first year and $591,000,000 each year thereafter. The President asked for 792,000.000 annually for three years and $620,000,000 thereafter. Speaker Byrns predicted on April 13 that the Chief Executive would insist that sufficient new taxes be provided to restore the budget to the position it occupied before invalidation of the Agricultural Adjustment Act and passage of the bill for immediate payment of the bonus. It was thought, however, that the task of rewriting the tax bill to accomplish that objective would be left to the Senate.

Failure of the Ways and Means Committee to approve the President's suggestion that new processing taxes be levied at low rates on a broad list of agricultural commodities is chiefly responsible for the revenue deficiencies of the pending measure. It is now believed that there is more than an even chance that the Senate Finance Committee will revive that proposal, that the Senate itself will consent, and that the House will finally accept the change. The difficulty of finding other adequate sources of revenue not politically objectionable lends support to this view.

Consumption Taxes vs. Higher Personal Income Taxes

It has been said that the Senate Finance Committee will consider as a substitute for new processing taxes an upward revision of individual income taxes. Early in March the Treasury gave estimates on several proposals of this nature as alternatives to the suggestions contained in the President's message. It stated that by lowering the exemptions for single persons from $1,000 to $800 and for married persons from $2,500 to $2,000, an additional revenue of $45,000,000 could be obtained. An increase in the rate of the normal tax from 4 to 6 per cent was estimated to yield $121,000,000. A reduction of the surtax exemption from $4,000 to $3,000, accompanied by a sharp increase in surtax rates up to the $100,000 bracket, was estimated, moreover, to yield $226,000,000, while a combination of all these proposals was counted upon to produce $446,000,000.